No-Code App Builder Investment Memo


The no-code app builder space is poised for growth over the next few years, supported by favorable tailwinds exacerbated by COVID-19’s impact on the labor market. Bubble and Adalo are promising companies in the space, leveraging their communities to build strong user retention. Although the sector faces risks stemming from skepticism about no-code app scalability, the “low cost / high fidelity MVP” value proposition is compelling enough to drive growth in the near term. 

No Code Defined

No-code includes a myriad of companies that help folks achieve personal or business objectives that previously required code. This analysis refers specifically to no-code app builders, which are specifically designed for relatively inexperienced builders creating fully functional apps (not just clickable prototypes). Although there are several platforms that fit the “low code” description, they are precluded from this analysis because they are unable to appeal to new audiences of builders – builders who have no prior coding ability. Promising early stage companies in the space include Bubble & Adalo. As a caveat, I must mention that I have worked at Bubble for nearly a year and those experiences have influenced my analysis. 


Core assumptions

  • The population of workers who “own” their labor either through freelancing or entrepreneurship will increase over the next 10 years
  • COVID-19’s effect on the labor market will exacerbate this “ownership” trend
  • The no-code value proposition of a fast & cheap MVP for iteration will continue to be compelling


A few key trends are pushing the no-code app builder industry. Although this pre-dates the pandemic, worldwide reactions to COVID-19 have accelerated a shift within the labor market towards freelance work and entrepreneurship. Since 2014, the number of freelancers in the US has grown from 17% to 29% of the workforce, projected to reach 51% by 2027. Entrepreneurship is also rising. According to Oberlo, there are 582 million entrepreneurs worldwide, with entrepreneurship in the US rising at 6% per year. This presents an excellent opportunity for no-code platforms because they provide this growing “owner economy” with the ability to generate their own revenue on their own terms. The primary barrier to entrepreneurship has always been availability of capital, which is in large part driven by expensive engineer costs to build initial versions of unproven ideas. No-code platforms remove this engineer barrier, replacing cash with time as the only investment needed to build your product – and therefore your business. 

Gartner wrote that 56% of all applications will be built on low code / no-code by 2024. This space has already seen significant traction in the form of fundraises in 2019-2020. Bubble raised a $6M seed round led by Signalfire in 2019. Unqork raised a $51M Series B and $200M Series C both within the year 2020. 


With COVID’s labor market effects expected to continue for the next 5-10 years, the no-code app builder space is poised to grow and become an integral part of the tech ecosystem.


“No-code cannot replace code”

  • Many are skeptical of the ability of these no-code platforms to replace traditional coding. They are correct in that there will always be a place for coded platforms. No-code platforms are by definition only capable of building “well understood” problems. Today, that means social media networks, marketplaces, CRMs, etc. No-code platforms will likely never produce the next disruptive company from a product perspective. However, many successful tech companies (AirBnB, Uber, etc.) innovate on business model or go-to-market strategy, not product. While no-code can’t replace 100% of built apps, they can replace the ~80% that are new takes on familiar platforms (Uber for X, Tinder for Y, etc.). This presents ample opportunity for no-code platforms & their investors to generate significant revenue.

“No-code apps are unscalable”

  • Another common concern is that no-code platforms, because they are dependent on the companies that build them, may not be scalable. This concern is valid in that most no-code platforms reach latency limits as their users’ apps grow and require more capacity. Switching costs are often very high and security is not always guaranteed, so committing to a no-code platform could present significant consequences for an entrepreneur. However, emerging companies are beginning to challenge this notion. Comet – a freelancer marketplace – scaled to $800K ARR on Bubble, raising $13M. Lattice built their front end without code in Webflow and have raised nearly $100M. More importantly, the target customer for a no-code product is aware of these risks, but sees the value of faster MVP iteration and lower startup costs to be worth the investment.    
  • The most likely result of the scalability issue is that no-code app builders could become a permanent fixture at the beginning of the product development value chain. No-code platforms have been proven to help get a minimum viable product to market 4.6X faster. Companies may leverage the no-code app builders as a testing ground to better scope out coded builds. 

How to win

Companies that will succeed in the space need to nail the most important 3 stages of the customer value chain – acquisition, onboarding, and retention. These factors are mainly driven by community strength and product education quality.

Customer acquisition: convincing the user to invest their time

Within the no-code app builder space, customer acquisition ability can be approximated by community size (total users) and community engagement (activity in online forums or blogs). Larger & more engaged communities help with customer acquisition by de-risking the time & money investment for users. They also fill in the education gaps for the platform by allowing users to educate each other. 

Customer onboarding: converting a new user into a paid power user

No-code app builders take a hybrid approach of consumer and B2B tactics, serving both customers. But in either scenario, their most lucrative users are those who spend over 100 hours on the platform within their first few months. Although no-code is much faster than coding, the learning curve can be very large for folks, especially those who are nontechnical. No-code companies with more available educational resources about the idiosyncrasies of their platform can hack this learning curve and grow their power users.

Customer retention: growing with your users 

Like most industries, no-code platforms make the majority of their revenue from the “power users” – large companies that host their software on the no-code platform, serving thousands of users per day and yielding the most MRR. In my experience, this comes down to:

  • Quality of customer service support
    • Users (especially in their first few months) require a lot of support in the form of a large volume of easy tickets. Having a robust customer service function to clear these tickets can be the difference between a user finishing their product and becoming a power user or giving up to try a competitor.
  • Scalable product infrastructure
    • It’s impossible for any group of developers to build in all the functionality that users can want. Allowing for users to build integrations & plugins prevents user drop-off due to functionality hurdles
  • Availability of programming labor
    • The best no-code platforms have a proliferation of available freelancers to support the initial user as they scale their platform. This pool of programming labor will eventually form the company’s no-code development team 

Promising Companies


One of the oldest no-code app builders, over 8 years Bubble has acquired 900,000 users with a robust forum of X members posting 200+ times per day, the highest engagement of any app builder in the space. Bubble boasts a customer success team that responds to all users within hours and thousands of plugins to expand user app functionality. However, Bubble does not support building native apps, a feature in high demand from no-code builders. Bubble’s onboarding is currently lacking beyond simple “getting started” content because the scope of what can be built is so open-ended. They have recently invested on this front, hosting Bubble bootcamps, the Bubble Academy, the Immerse pre-accelerator, and the Bubble coaching marketplace, but these efforts are new and unproven. 


Since launching in November of 2019, Adalo has grown to over 150,000 users to date with a forum that has 600 monthly posts. Their functionality is more intuitive “drag and drop,” allowing for their onboarding process to be more streamlined and increase retention. Their platform has the ability to publish native apps to the Apple & Google play stores, a feature not common within the space. Their largest risk is that because they are new, they do not have a proven track record or a large proliferation of available developers. This could prevent more serious entrepreneurs who would later become power users from choosing their platform over others. To combat this, they have invested in creating educational content and supporting “expert partners” who can help users build. 

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